The iShares Silver Trust (SLV), the world's largest silver exchange-traded fund (ETF), has seen its price drop nearly 60% from its all-time high of $109.83 per share, reached on January 29, 2026. Today, it trades at approximately $47. This decline comes despite a 277% gain over the previous 12 months leading up to the peak. The ETF, sponsored by BlackRock and holding $26.4 billion in assets under management, stores its silver bars in secure vaults in London.
Several macroeconomic factors contributed to silver's price surge and subsequent fall. At the start of 2026, expectations of Federal Reserve interest rate cuts, strong industrial demand for silver, and supply constraints drove prices higher. However, the outbreak of the Iran war in February disrupted this trend by increasing oil prices and inflation, prompting the Fed to raise interest rates in September. Higher rates strengthened the U.S. dollar and made fixed-income investments more attractive compared to precious metals.
The AI market, a significant driver of industrial silver demand, also faced challenges due to higher interest rates, which made building new data centers more expensive. Additionally, several Democratic governors called for moratoriums on new data center permits, further impacting demand.
Despite near-term selling pressure, silver is expected to recover over the long term. A potential Democratic takeover of Congress could lead to an end of the Iran war, reducing oil prices and inflation, and prompting the Fed to cut rates. If this occurs, the headwinds for silver and other precious metals would dissipate. Investors considering SLV for long-term holdings may find it a stable hedge against economic shocks.